Sam Fletcher
Senior Writer
HOUSTON, Aug. 23 -- Energy prices were mixed Aug. 22 as Iran refused to abandon its uranium enrichment program but offered instead to engage in new negotiations with the West.
Fearing that Iran is preparing to make atomic bombs, the United Nations Security Council has demanded that the country stop uranium enrichment by the end of this month or face international trade sanctions. Iranian officials have indicated at various times that Iran may cut its crude exports if UN sanctions are applied.
"The more important catalyst [for changes in energy markets as a result of this standoff] will most likely arrive after the Aug. 31 deadline that the UN has imposed," said analysts in the Houston office of Raymond James & Associates Inc. "If and when this deadline is ignored, the big swing factor in oil prices will come when the ramifications for Iran are announced."
Meanwhile, the pending end of the summer driving season after the US Labor Day holiday on Sept. 4 is putting downward pressure on fuel prices, Raymond James reported.
Energy inventories
The US Energy Information Administration said Aug. 23 that commercial inventories of US crude declined by 600,000 bbl to 330.4 million bbl during the week ended Aug. 18. Gasoline stocks increased by 400,000 bbl to 205.8 million bbl in the same period, while distillate fuel inventories rose by 2.3 million bbl to 135.5 million bbl, with a large increase in ultralow-sulfur diesel and a build in heating oil.
Imports of crude into the US increased by 175,000 b/d to 10.2 million b/d during that week. The input of crude into US refineries increased by 169,000 b/d to 15.7 million b/d with units operating at 92.8% of capacity. Gasoline production increased slightly to 9.3 million b/d, while distillate fuel production increased to 4.1 million b/d.
Energy prices
The September contract for benchmark US light, sweet crudes gained 18¢ to $72.63/bbl Aug. 23 on the New York Mercantile Exchange. The October contract, however, dropped 20¢ to $73.10/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 18¢ to $72.64/bbl. Heating oil for September delivery increased by 0.39¢ to $2.04/gal. Unleaded gasoline for the same month inched up by 0.27¢ to $1.94/gal.
The September natural gas contract climbed by 38.4¢ to $7.01/MMbtu on NYMEX. EIA is expected to report Aug. 24 an injection of gas into US underground storage for the week ended Aug. 18 that will be "quite a bit higher than the last few weeks as the hot weather subsided, coming in 4% cooler than the same week last year," said Raymond James analysts.
In London, the October IPE contract for North Sea Brent dipped by 14¢ to $73.24/bbl. Gas oil for September delivery increased by $3 to $651.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes gained 6¢ to $67.98/bbl on Aug. 22
Contact Sam Fletcher at [email protected].
